07 Dec The Value of a Freight Forwarder
The Value of a Freight Forwarder
What is a freight forwarder? Simply put, a freight forwarder is someone who specializes in the organization and arrangement of freight transportation, especially via air or ocean, although not limited to those modes. If you have ever shipped freight internationally, you know it is not as easy as booking a carrier and off you go, there are many forms that need to be filled out as well multiple parties to get your freight to its intended destination. This is where the value of a freight forwarder really comes in play. Think of them as a travel agent for your shipment. They don’t physically move the goods, but they can use their knowledge to choose the best carrier, negotiate rates, arrange pickup and delivery, and help prepare all the necessary documents for things like customs clearance.
Let’s review a few of the other benefits of working with a Freight Forwarder:
First let’s talk about their Agent Networks. Most freight forwarders have agent networks that span domestically and internationally. This means that the forwarder has vetted pickup and delivery people in the areas you are shipping to or from, and can coordinate the local pickup or drop off, because remember the airlines and ocean carrier only travel port to port, you still need a local pickup or delivery.
Next let’s talk about rates. Most freight forwarders have negotiated rates with airlines and other transportation carriers which usually are better rates then you can get on the open market. Typically, in transportation, the more volume you ship, the better rates you can get. Forwarders can get lower rates than an individual shipper because they can consolidate the volume of all their customers, which can create savings passed down to their customers. Also if you as a shipper wanted to work directly with airlines you would be required to register as an Indirect Air Carrier (IAC) with the TSA, so by working with a freight forwarders saves you the trouble of keeping up with their requirements.
Freight forwarders are established with international organizations that handle the necessary banking or financing transactions that need to occur for an international shipment, for instance paying airlines and customs duties and taxes. This can ease the burden of the shipper by reducing the amount of payment parties for a single shipment.
A good freight forwarder will be able to use their knowledge and experience to help you in every aspect of a shipment, even shipment packaging or how to transport hazardous materials, and can be an invaluable partner to your logistics team.